Thursday, July 25, 2024

USD vs Bitcoin – Is the Dollar in Peril?

The US dollar holds supremacy when it comes to the global financial system. That makes it difficult for other nations to avoid the dollar altogether. This has the effect of tying nations to the US currency, as well as exposing them to sanctions from the US.

In his State of the Union speech in 2018, the then President of the European Commission, Jean Claude Juncker, spoke on the dollar. He said that he found it absurd that Europe pays nearly 80% of the bill related to energy import in a foreign currency, the US dollar.

Competition From Bitcoin

The growing demand for Bitcoin has led to discussions on whether cryptocurrencies could displace the US dollar. Given the kind of price volatilities cryptocurrencies currently experience, that may not be true yet. Despite this, the shift can happen with time, as payment functions related to cryptocurrencies improve. This could hold especially true if stablecoins start to receive more traction.

If cryptocurrencies gain favor and become the dominant currency globally, then cross-border transactions would also become easier. This, however, would result in the position and influence of the dollar weakening.

Irrespective of this, the value of the dollar, as well as other reserve currencies, is unlikely to be affected on the whole.

Dollar Not Under Threat

Reserve currencies are not expected to receive any serious challenge when it comes to stores of value. However, digital versions of reserve currencies, as well as better cross-border financial exchanges, could create competition among the reserve currencies.

The dollar, however, is not currently under threat from this competition.

Cryptured Team
Cryptured Team
The writers team at is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.

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